Disclosure: A Guide to Seeking Norwich Pharmacal Orders

An Overview

It is a general rule that discovery may only be obtained from a party to a substantive action in progress, and that an action cannot be brought against a person solely to obtain discovery from them but only to proceed against them in respect of a reasonable cause of action.

Exceptionally, the Court may make orders that non-parties give discovery of documents where that discovery is necessary to the applicant’s case and the non-party has become, even if innocently, involved in the wrongdoing in respect of which the applicant wishes to bring his case.

NPOs are frequently used in fraud cases, where the third party from whom information is sought is often a bank whose accounts or services have been used to receive or dissipate the proceeds of the fraud, and the information sought is about the identity of the fraudster and/or where the funds have been diverted to. An order requiring a bank to give disclosure of a third party’s account information to assist a victim in tracing assets is also referred to as a ‘Bankers Trust’ order¹.

One of the benefits of NPOs is their flexibility. Used effectively, they offer real potential to unlock crucial information that a victim needs to pursue a claim, and which they would struggle to obtain through other investigative methods. Organisations such as banks, internet service providers and mobile phone operators have a wealth of information about their users and NPOs provide a means of accessing that otherwise confidential information.

Criteria for obtaining an NPO

Is there a good arguable case that the plaintiff is the victim of wrongdoing?

• It must be more than just arguable that there has been wrongdoing, although there is no need to show that the victim would have more than a 50% chance of winning at a trial against the wrongdoer.
• The wrongdoing can take a wide range of forms: for example it might involve a fraud, breach of intellectual property rights, or dissipating assets to evade a judgment.

Is it in the interests of justice to order the third party to make disclosure?

This involvement may be, and often is, entirely innocent. However, an NPO cannot be obtained against someone who is a ‘mere witness’ to the wrongdoing, or just happens to have some relevant documents. As noted above, frequent targets of NPOs include banks, internet service providers and website operators.

Is there a reasonable suspicion that the third party has been mixed up in the wrongdoing?

Necessary and proportionate

The court has a discretion and will weigh up various factors, including:

• The strength of the victim’s potential claim;
• Whether it is just to make the order;
• The public interest in allowing the victim to vindicate his legal rights;
• Whether making the order will deter future wrongdoing;
• Whether the information could be obtained from another source;
• Whether or not it is necessary to make the order; and
• The purposes for which the order is sought.

The best interpretation seems to be that NPOs may be made where they are necessary, in that without them the applicant would be denied or effectively denied the ability to formulate his case, thus frustrating the operation of justice. However, it will most often be identity cases and fraud cases in which the orders are necessary.

In identity cases, this is because, unless the identity of the defendant is known, there will be no proceedings at all in which the plaintiff can seek a remedy for his wrong. It can be seen as a clear denial of justice for the plaintiff to be deprived of its remedy when the respondent can assist it, especially in circumstances where but for the respondent’s (albeit innocent) involvement, there may have been no wrong done to the plaintiff at all.

As for fraud cases, the nature of fraud is such that the fraudster will usually seek to escape with its ill-gotten gains by moving them as far from their source as quickly as possible. Then, even where the plaintiff has enough information to bring proceedings, were it to wait until trial to be provided with evidence, its funds would likely be long gone and the trail it seeks to trace long cold. Hence, postponing the provision of the information would deny it justice. However, the overriding criterion is that such discovery is necessary for the plaintiff to formulate his claim. Where the plaintiff can formulate its claim it does not need to obtain preaction discovery but can wait for discovery in the ordinary course of the action. Further, although an order might be drawn widely in appropriate circumstances, it is illegitimate for the jurisdiction to be used for a ‘fishing’ expedition in which the plaintiff wishes simply to browse the information held by the respondent in the hope of finding something interesting. Instead, the plaintiff must be able to articulate the nature of its claim and the type of information held by the respondent to demonstrate why such information is necessary prior to the initiation of proceedings in order that the plaintiff can initiate such proceedings.

Procedure for Applying

An NPO may be obtained either in the course of existing proceedings or, often, as a precursor to further action. An order can also be sought before proceedings have started.

It is necessary for the applicant to prepare a witness statement setting out the background and how the criteria for an NPO are satisfied, and a draft of the order the court is asked to make.

In O’Brien v Jersey Evening Post Ltd the court refused to grant an order, holding that it would not exercise its power to order the disclosure of information by a non-party in relation to proceedings which had not yet been instituted, unless refusal to do so would amount to a denial of justice. That would only be the case if, without the information, either the applicant would be unable to identify the defendant and would therefore be precluded from bringing an action at all, or he would be unable to present a defence to the action to be brought against him. The applicant in the case was already able to bring an action and was merely seeking evidence to support his allegations.

Using the information

An applicant who obtains an NPO is subject to an implied undertaking not to use the information provided for any ulterior purpose i.e. it may generally only use that information in connection with the proceedings in question. It is a very serious matter to breach this undertaking to the court. However, if the information is subsequently needed for other purposes, an application to the court may be made for permission. For instance, it may be possible to obtain permission to use information obtained via the NPO process for related criminal proceedings.

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¹ The test for obtaining a ‘Bankers Trust’ order is slightly different from that for an NPO, but in practice applications are often made on both bases. This note focuses on the general principles applicable to NPOs.